Sunday, September 30, 2007
A lot of people I think are the same way. I think we could say no if the circumstances were right like alcoholism, gambling, or drug use. But if the family member were in dire circumstances because of job loss, medical illness, etc, I think many people would have trouble saying no.
I think it's probably better to say no, but the reality is it's hard to. Plus in the end it's just money. You can earn more, save more. I get that philosophy from my mom. She's unfortunately set a terrible example of supporting my grandparents. But personally I would feel really greedy and stingy if all I did was save my money and never shared it.
I enjoy giving people presents. I also don't expect to get paid back. For my BIL well, we used to pay for his cell phone on our family plan until he got a girlfriend and started abusing the minutes. Then we kicked him off. Was it wrong to get him a plan? Maybe but it was cheap and easy for a young man starting out.
I buy the newpaper and phone for my grandmother whose a very fixed budget. I used to mail them gift cards to the supermarket. I guess this is another reason why it's so difficult for me to focus on paying off the house. DH and I feel great responsibility for our families. And we need to be able to help them out in case of any emergency. So having accesible cash is a necessity.
Perhaps not the wisest financial decisions. But we do realize the position we're in. And we do realize that we're not there to solve all problems. But we can try to guide them to a better solution.
Do you loan your family money? What about friends? We've also had good karma about being loaned money from our current tenant, so I won't say I wouldn't pay back the favor. In the end to us it's still just money.
Saturday, September 29, 2007
However our retirement accounts hit $65k with returns and savings. Also our mortgage hit $444k. I'm dying for it to get below $440k. And I decreased the couch owed on the CC. Small steps towards greater financial security.
Friday, September 28, 2007
I guess it depends on where you live, and what point in your life you are. The lifestyle choices are probably shaped due to interesting circumstances. I know that Fabulously Broke in the City a guest poster, lives out of a hotel room without an apartment. Because of this I can guess they eat out more than average. But they save tons of money by not paying rent or mortgage. A very neat lifestyle.
I am rather impressed by the results of the poll. It seems not that many people are indulging in eating out as polls of the average americans would claim.
Thursday, September 27, 2007
Unfortunately he has been feeling terrible and there was nothing else to do but go to the ER. So we did. But we're not exactly sure what the bill will be. He had a ton of tests done including the urine test, ultrasound, and blood test. It might be an ulcer. The doctor referred him to a specialist.
Anyway because of his lack of real health insurance, DH and I covered him. We signed the responsibility form because my in-laws don't have the cash in US dollars and have to go home cash out their stocks and convert it to american dollars.
I wonder what the full bill will be. We just had to pay $1k, but I have a feeling that we'll end up paying substantially more. This insanity calls for reform, but most Americans would disagree.
Would you be willing to pay more taxes for a universilized system?
Tuesday, September 25, 2007
Not because it's financially difficult, but because of the psychological strain it can have on a marriage? If 50% of marriages end in divorce, and the leading factor contributing to divorce is fighting over money, then can increasing financial problems due to having children lead to divorce?
So while it's great to have kid at any time, I wonder if people should consider their financial position, thus reducing the risk to their marriage dissolving? That if there are less pressures financially people are happier in the marriage and dealing with normal family issues? That a couple constantly worried and arguing about money could have made it if not for the finances? That the extra burden is what tipped the scale towards divorce.
If you are divorced, was it due to finances? And might it have been mitigated if you had planned your expenses, especially kids?
Monday, September 24, 2007
Were these all lucky moves or was it smart planning on our part?
I know luck played a huge part in our finances. But honestly smart moves also played a role. We are scientists by nature and we calculated the odds of every financial move we made. When we first bought a condo in CA, we thought the market's peaked if it drops what will we do? We decided it doesn't matter, it costs as much as renting. Let's do it.
We decided we could easily afford to hang onto the home during a downturn. Plus because we were so young, we decided we could only afford a 1 bedroom though the bank said easily 2 bedrooms. Most of our friends said we were stupid buying a 1 bedroom because they are harder to sell. Also we bought in a lesser location because we could not afford to live close to work, and not in a good school district. We compromised and weighed all these factors and still chose the area because it worked for us. We also decided that we would take all of our savings and buy a home. The market looked terrible and we didn't have the time to research our portfolio's like we had in the past.
So was it really luck or a smart choice? How many people are willing to live in a tiny one bedroom as a couple? And how many are willing to drive a bit further to afford to buy? These are choices we made that contributed to our financial security.
Then we moved cross country and bought another place. We again decided against a house again. This time we could have bought a single family home, much farther out. But as we were not having children for at least 3-4 years, we decided a townhouse would be a perfect compromise. We would be able to live closer and thus saving a lot of time on our commute. Sure we paid a premium for a great location, but the commute turned into a blessing.
With DH working full time and school part-time, our time together is limited. By saving on commuting, he is able to focus on finishing school faster and thus increasing our income. We wisely decided to buy a townhouse which has space for us to have 2 children. Though we planned on only one child before moving. We also considered that our townhouse is large enough for our parents to live with us and provide childcare for an extended period of time if necessary.
But because of the location both of our parents feel comfortable living with us and not driving, while not being isolated in the suburbs. Instead they would be able to walk and ride the bus into the city, shop, and occupy their time easily. They are very happy with our choice, the only problem is that we lack a full bath on the first floor, something which we had been searching for when buying a townhouse. This was to accommodate our elderly visitors.
So financially our townhouse has been a great investment. We pay about the same as renting a townhouse. But of course our neighbors do leave a lot to be desired. Thus our sacrifice of having neighbors, while I question it, probably is smarter financially than a single family home.
But at our current ages 28 and almost 30, most of our contemporaries are struggling to afford single family homes. They feel a townhouse is beneath them. That it's not the right place to raise a family. They are saving to get into a home. But we've already gotten ourselves used to owning, building equity, and we understand this is a temporary choice until we can finally afford a home we love. But how many people again are willing to make this sacrifice? So smart move or luck?
Third, we've just about saved $75k in retirement savings in a little less than 2 years. All through hardwork and sacrifice. During our "leaner" years I told DH when we make "real" money our lifestyle will not change until our retirement options are maxed out. We won't build up to it, we'll take it off the top before taxes, rent/mortgage, everything. It was to be a non-negotiable, budgeted line item. We did exactly that and it's been a painless transition. Now our raises/bonuses go to school tuition (an unexpected expense because we didn't know it would be so expensive). But our lifestyle is still pretty cushy.
Finally, we own two newer cars that while are not fancy, are workable. They do not match our "income" and they do not always fit our needs. But how often do we need larger/fancier cars? We can rent or drive both cars if necessary. We were forced to buy 2 newer cars starting out because unlike many of our contemporaries, our parents never gifted us with an older, used car. More than a few people were given their parents older car as a first car. So did we get lucky, or was it a smart choice? Luck would have been getting a free car, smart was sticking with our cheaper cars even though we make a lot more.
So has all these financial decisions been smart or lucky? I have to explain a bit because people always ask how do we manage? Not easily and everything we've done has required sacrifice. We've chosen not to buy new cars, have children, or shop all the time because we're trying to build our financial foundation now. But everything comes with a price tag. If you review your own purchases, did you make the decision consciously or not? Were the choices you made lucky or smart?
Sunday, September 23, 2007
I wonder what role the earning power of a potential degree plays in people going to college with loans? Or going back to earn another degree. Where do people draw the line?
I think it would be awesome if we could all do something we loved. Or will always love. There is always the possibility that after 10 years or even 5 years you don't like your chosen field.
Right now about 5 friends who became school teachers are quitting. Yes, the friends who student taught and appeared to really love kids, they are quitting. It's too hard, too much stress. People think teachers get the summers off, but it's probably because otherwise they couldn't deal with the kids. And it's getting worse each year.
So of those, a few are taking classes trying to figure out a new career. They thought in college this was their lifetime career, but things have changed. So I can't question them obviously in real life whether their future decisions are influenced by $$$. But I do believe it's hard to make a decision not financially based. Also more than a few did tell me they wonder why they ever chose teaching.
So are we really retooling because we didn't know what we wanted at 18? Or because what we wanted at 22 morphed so much that what we enjoy at 32 is different? And what we enjoy at 42 will be different again? Are we now redefining ourselves ever decade? And if so are we doing it for financial benefits or emotional ones?
Is it necessary to stick with a job that makes a person unhappy purely for financial gain? Is that the difference with today's generation. That we are less likely to stick to something that makes us unhappy no matter the financial repercussions?
Saturday, September 22, 2007
A second guest post by another friend from a message board cjohnston. Excellent ideas about budgeting and handling finances in general. Please enjoy...
The Purpose Driven Budget
Author Rick Warren authored several books over the past couple of years using Purpose Driven as a theme. The Purpose Driven Church and The Purpose Driven Life are two that quickly come to mind. Both books have been highly successful and have become standards for Followers during the new millennium.
Leveraging off Warren’s all things Purpose Driven, I propose the Purpose Driven Budget.
Let’s face it. Developing a budget is for most of us about as fun as sitting in the dentist chair, hearing the high pitched whine of the high speed drill and waiting for the drill tip to hit the nerve the Novocain missed. As a matter of fact, the dentist example may be even more pleasant.
Where is this all going? About 18 months ago, my wife Diana and I attended Dave Ramsey’s Financial Peace University being sponsored at a nearby church. At the end of the second class, our homework was to develop a budget, or as Ramsey calls it, a spending plan. We needed to spend every penny of our income in budget form on something. On paper and on purpose.
The process took an entire Saturday with both of us working to reach a magical zero at the end of each week and ultimately at the end of each calendar month. Remember, we were to spend every penny. But the key to the process was to spend it on purpose. What a novel idea.
The other key is you will see I used the phrase both of us. It was a team effort. Each previous attempt was done with me noodleing out a budget and then laying down the gauntlet with no buy in from my spouse. BIG MISTAKE. But while working together was a big piece of the puzzle what made it all happen and was the cornerstone was a spending plan. And even more important, on paper, on purpose.
Frankly, that process was a breakthrough for me. And us. For years both of us had tried various forms of budgeting and ultimately ended up chucking it a few weeks into the process. But throughout those failed budgets was the misconception of trying to save the money, not spend it. Sure, it’s a matter of semantics. But for the first time, we had a budget that worked. It wasn’t perfect. It took a few months of tweaking to get it to behave in a somewhat predictable manner. But overall it worked.
So why the difference and why does it work better? First, it’s always more fun to spend money than to budget it. For the spouse or partner who doesn’t have money and finances top of mind, a budget is seen as a control technique. But a spending plan. Now that’s something they can identify with.
On paper and on purpose though does something else. Getting the numbers out on paper allows you to see where the money is going. It gets the numbers out of your head and in front of your eyes. It’s funny how your mind works better when it is working in tandem with one of your other senses. You now see your spending plan, line item by line item. Savings, groceries, clothing, charitable and church giving, gifts, travel and home expenses. The good, the bad and the down right ugly. But for those who now have a purpose in getting this information out on paper and have actually spent it on purpose they can now see some surprising results. And for many, it’s the first time the long jumble of numbers is out of their gray matter and in front of their eyes.
The Financial Peace kit contained a list of recommended percentages of your income that should be allocated for each of the categories. It suggests you need some money going toward entertainment and other fun categories. No need to beat yourself up when allocating some money toward those items.
But the whole process is to get the numbers in front of you and then compare them to what the recommended percentages should be. At that point, it’s simply a matter of establishing the priorities of lowering the amounts that are too high and raising the amounts that are too low. It’s a process that can take a few months or several depending on where the excess is. If it’s in spending on things like food or fun, you simply make the quick adjustment. If it’s asset items like homes, cars, boats or other expensive toys, the process may take longer and be more painful and expensive to adjust. But with the on paper on purpose process, you may now see for the first time why and where your money is going.
For those who are in financial turmoil, even after doing this process, it may be wise to pick up a copy of Dave Ramsey’s Total Money Makeover. The book will help you look at the myths of money and develop a plan that will allow you to gain control again. Dave will help you take baby steps that are logical and simple.
On paper, on purpose. The Purpose Driven Budget. The process that will ultimately guide you back toward financial peace and building wealth.
Friday, September 21, 2007
I'm a big fan of Dave Ramsey's Total Money Makeover. His no-nonsense get-out-of-debt plan is something that can work for the average Joe. While my husband and I were in Canada we paid off $70,000 worth of debt in two years on an $85,000/year salary using Dave Ramsey's method, which we had tailored to our own needs. We cut up most of our extraneous credit cards, we used cash money to buy things, we planned for expenditures in advance and we invested a good portion of our wealth.
Then we moved to America and everything changed.
My husband was offered a lucrative position at a big American company and we thought it was a dream come true. We figured the big move next door would be as simple as going on an extended vacation. But we were horribly mistaken. We've been here a year and the messes keep piling up. We're constantly having to file new paperwork for USCIS, the DHS, the IRS and whatever governing body happens to call on us for kicks. Our biggest problem thus far, however, has been that necessary evil called CREDIT HISTORY.
Being Dave Ramsey followers we figured credit history was unimportant. That credit cards
themselves were unimportant. We were woefully mistaken. Because we have no credit history in America, getting any kind of service has felt impossible. We had to put down $500.00 as a security deposit on our electricity service, $1, 000.00 as a fee for our cell phone service and $2700.00 down on our apartment rental, just as some examples. We still haven't gotten those fees back. We just bought a house and had to pay fees to the mortgage lender to check our Canadian history. We still couldn't get the best rate. If we had an American credit history it would never have been a concern.
Our one saving grace was a local credit union who offered us a credit card when we first moved here. The reason they gave it to us, they said, was because they had a good history with my husband's employer and they trusted that company's employees. So, thanks to the big American company, we got one little Visa card from a small local bank. There are no special features of this card. It's just a standard 18%, no annual fee Visa. But the fact that they report to the credit bureaus has given us a shot at being recognized as real people, with honest intentions to consume huge quantities of American merchandise, and then pay for it. We use our little Visa card whenever we can. We pay in full and then we use it again.
I still adhere to most of Dave Ramsey's basic principles - don't spend more than you earn, save for your future and give, give, give. But the cash cow that made him famous - the Stop-Using-Credit-Cards-Completely mantra he pushes - just doesn't work for the little guy. It's horribly unfortunate, but its true.
I still adhere to most of Dave Ramsey's basic principles - don't spend more than you earn, save for your future and give, give, give. But the cash cow that made him famous - the Stop-Using-Credit-Cards-Completely mantra he pushes - just doesn't work for the little guy. It's horribly unfortunate, but its true.
Thursday, September 20, 2007
Then I sat back and questioned what the heck am I doing worrying about $844 of CC debt? I owe close to $500k between my mortgage and student loans. Can you see the disconnect? I owe close to half a million dollars and I'm sweating owing $844 on a couch?
Where is my perspective? Why am I not more worried about the mortgage and student loan? Why am I not killing myself over those two debts? I owe 2x the average mortgage of the US. I read many blogs about people complaining about their CC debt and I have mortgage more than 4x what someone owing $100k does. And I'm not frightened out of my mind?
This thought stumped and bothered me a lot. I nearly keeled over when I realized the impact of what we owe. We owe more than most people's CC debt, car loans, student loans, and mortgages combined. I think it's the fact that everyone is so focused on not having "bad" debt. That they forget that a mortgage is debt as well. That we don't own our house, we're just renting it from the bank. That we are using borrowed money to further our educations. Sure those are suppossedly good debt but it's still debt.
So anyone paying off debt will probably be crying out against my 0% CC, while cheering my enourmous mortgage as "good" debt. As necessary debt. How crazy is that?
I'm hopeful that things will get better and we'll be able to pay off our student loans before the interest ever hits. I'm saving money to maintain our home properly and our cars. I am using this blog to keep from getting "incomtitis" and adjusting our lifestyle to what our income is.
I guess I'd love to live large one day and who konws when that will be. But we're moving there one saved dollar at a time.
Wednesday, September 19, 2007
Our income just barely covered all our bills and I had student loans about $10k that I wanted to pay off in 1 year and I did. DH made $18k gross, I made $30k gross, and our rent at the time was $1100/month for 1 bd. Hey Southern CA was and still is expensive. After taxes, looking at our old paystubs DH cleared I believe $500/bimonthly and I cleared $600/bimonthly.
We also had a car loan of $150/month, high car insurance because we were independent 20 and 22 year olds with full covereage = $300/month and no other way to get to school/work. If you live in So CA, you'll understand when I say there is no public transit. So after paying all our bills, I used to budget $25/week for the two of us.
For one thing our menu rarely changed and we ate a lot of the same food. We ate a ton of pasta, tomato sauce, and ground beef. All of it was bought at costco. For variation when Chicken breast was $1.69/lb we bought that. This was our staple meal. To add vegetables we would buy either canned or frozen veggies and throw it in. We ate this about 3-4x week for lunch/dinner. Another cheap meal was rice, chinese veggies, and pork pieces. We would stir fry the pork in black bean sauce, soy sauce + sugar. We didn't eat anything else, in case we didn't make enough dinner for leftovers, our lunches were packaged noodles.
To me coupon shopping did not help because we didn't buy any prepackaged foods (too expensive). We bought tomato sauce (prego), ground beef, chicken, and pasta. There also weren't coupons for chinese veggies, rice, etc. This was the most economical shopping.
We planned our menus, shopped solely from a list, and stuck to $25/week cash. If it went a penny over we returned it. During this time we also had a lot of free food from school, friends were generous and invited us over, and when our parents visited they would graciously fill our freezer with meat.
I don't reccomend eating this way long term. I don't think it provides enough nutrients and vitamins for the daily requirements. Personally we would have cut cable if we had it, didn't have cell phones, only a home phone, shared internet with neighbors. So our only flexibility in the budget was food. As our income increased it was the first area we immediately increased. Also we probably could have spent more if we weren't trying to pay off a school loan and save a cash EF. Turns out our savings allowed us to buy a house 2 years later.
Now I guess we spend $150/month per person on groceries. We eat very luxuriously and I admit it. I buy steak, seafood, lobster, chicken, cheese, fresh veggies and fruits, pretty much anything DH desires. I still don't buy much prepackaged foods, but I do buy expensive staples. How do I justify it? Well DH says he'd rather eat good food and not watch cable than eat crap food and watch tv.
Tuesday, September 18, 2007
Home equity and investments in Stocks/Bonds I think needs to be balanced. When considering a portfolio home equity does play a role in stabilzing and diversifying most people's investments. Unfortunately for us, we had a lot of home equity and still do, but little equity investments. This I think is a terrible position to be in, home rich and cash poor. Thus to me the next 5 years is to be spent bulking up our equity positions and retirement funds. That way our overall portfolio will be balanced.
Right now we have $155k in home equity with our DP and equity paydown. This is not counting any appreciation period. I think it hasn't moved since we bought it in 2005, I think below market price. We also did some major improvements which probably have helped the value including repairing a retaining wall for parking and installing a retaining wall for the backyard. Cost of those projects have been minimal, and currently we're installing a gas fireplace which is the first major cost incurred.
However, we unfortunately only have $61k in retirement and $30k in cash. This means we have $91k equity position. That means we have 63% of our net worth tied up in our house. In reality it's more like 80% because the $30k is partially an EF and the rest is cash for DH's school tuition (so it's gone though we're holding onto it). We carry too much cash I feel for people in our 20s, except that we need it to pay for tuition every three months. This is too risky to be investing in stocks or mutual funds of any sort.
This really scares me to have so much tied up in an illiquid asset. I don't think we're in a great financial position. We have too much money tied up in one asset. And as most people know tying up any portofolio weighted too heavily in one asset/stock is a bad idea. It increases the risk/volatility of the portfolio.
Thus I am hoping in the next 5 years to be at 50% home equity and 50% investments. I think this is a realistic goal. But our precarious position is an example of why paying off a home when you have few other assets can actually increase your risk.
Another point is that when we have enough in our taxable account to pay off our mortgage in one fell swoop I'll feel more comfortable. Until then we're going to hang on to cash so we can easily ride out a job loss for say at least 3 years and potentially 5 years. Chances are that if we lost our jobs, we'd have a substantial severance (happened last time 8 months but potentially 12+ months), and we'd likely find a job before time ran out. Another caveat is we've diversified our risk by broadening our career goals and opportunities with our degrees, hence we're more able to find a job we like and will pay well.
Monday, September 17, 2007
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Let's see how this works!
Now it doesn't need to be done instantaneously, but it will need work in the next year. I'd like to consider dumping this car and instead buying another used car in the $4-5k range. What I'm looking at are 97-98 subaru wagons. We could use the AWD and they are known to be reliable cars.
Now more about the Focus, we have totally redone the car twice. One someone smashed into us, and once DH hit someone else. Even with that we have had to replace the spark plugs, retune/clean the engine because the spark plugs were misfiring @ 30k miles, replace the brakes/rotors at 24k miles (we were told this is not unusual with fords), replace the gas pump, replace the steering column, and the door locks are starting stick as well as the hatch door lock doesn't shut well. Also two rims are bent (DH's fault).
Now I realize we're pretty much rebuilt this car it feels like multiple times, but I just don't understand why it's such a wreck. I have a 99 corolla and all we've done is change the brake pads and rotors once (recently at almost 90k miles), oil change and services. Nothing else. Runs like a dream. I can easily see myself keeping the car for another 10 years.
But what is the potential for keeping the Ford long term? Are we throwing away good money after bad? Should we suck it up and keep the know crap car instead of risking buying someone else's lemon? If we do all these repairs and then the engine or tranny blows (again fords have bad raps), then we really just flushed money down the toilet.
I know this is a case of sunk costs. But before we sink the $$$ into a car we aren't sure is worth it, I need to think about what the possible pros and cons are of doing so.
FWIW, we're not trying to spend money on a new car, hence we're trying to get a car for approximately the same value and mileage. Unfortunately it's 2-3 years older because Subarus are rated as more reliable cars according to consumer reports.
Maybe I'm being stupid and greedy, and I should just stick with our paid for car. We would not finance the car, but it's risky to trade a known evil for potentially an unknown entity. My DH is voting dumping the car because he doesn't like the idea of sinking more money in.
This will be a long debate probably. With guests in town we'll have a lot of time to mull over the different options and examine any deals that may come up.
Couple of articles I enjoyed were "Accepting Financial Responsibility," by To One Million and Beyond and "Which Jones Family are you Trying to Keep up with" by Mytwodollars. The first article asks people to realize that Debt doesn't happen overnight and they need to take personal responsiblity for the debt. This is a hard concept in today's society of the blaming everyone else. The second article just looks at people in debt trying to keep up with other people.
Enjoy the Carnival.
Sunday, September 16, 2007
When we lived in the West Coast most of our friend were just like us. They had just finished school and were starting to work, or going on to graduate/professional schools so they were broke. No one in our circle had any money. Hence, hanging out mostly consisted of free or cheap activites. We often had potlucks for lunch/dinner at our house with friends bringing food and beer. We would sit and watch a movie or play video games. Going out to bars, clubs, movies, restaurants were major luxuries in those days. But we often saw our friends every weekend, even sometimes during the week days.
When we moved to the East Coast, we had moved into a different financial situation and were able to afford a better lifestyle. However due to self-imposed budgetary constraints we chose to live a lesser lifestyle in hopes of saving for retirement, paying for tuition, and having children. Unfortunately this meant turning down people's offer of eating out for lunch and dinner quite often. My DH made during these past two years of brown bagging lunch everyday and so did I. We also ate out infrequently during the weekend, and we still don't go to the movies, sporting events, etc. For us those things are still luxuries, which we plan for and go to, but just frequently.
Yesterday we had a BBQ at our house, and our friends enjoyed themselves. However, most of them do not cook, nor do they really live in large apartments for entertaining. Instead live a very trendy and hip lifestyle of eating out pretty much every meal. Thus reciprocating will be them inviting us to eat out at a cool place and splitting the bill. Realize that these are mostly 30-something people who work and make a great salary. They are well able to afford any lifestyle they choose, especially since none of them have kids. Some are single (after divorces), some are married.
Thus, I guess I realized that we haven't changed all that much from our frugal student days. And I guess it's part of the reason we haven't made any close friends out here is that we don't socialize as much. What we have in common with these new friends is less. But we could build deeper friendships if we hung out with these people more. But that would require us to change our lifestyle and I'm not ready to KUWJ.
So do finances affect your friendships? I wonder if I can find other frugal friends? Our new roomie appreciates our frugalness because he's still a post-doc. So we often eat at home and going out is a treat.
So definitely finances affects our friendships...
Saturday, September 15, 2007
On one message board a woman said she didn't worry about retirement because as an only child, she expected to receive a rather large inheritance which would allow her to retire. Also her children's college tuitions were already taken care of by her parents and in-laws. She said her and her DH were the only "poor" ones.
This lead me to think, do people really expect to receive inheritances? I don't and neither does DH. Our parents have substantial savings but with early retirement, longevity, and rising costs of medical care, I doubt they'll be able to leave us anything, nor should they.
But are people overestimating what their parents really have saved? Do they think their parents have a fabulous lifestyle when the lifestyle is being provided for through a company pension and Social Security, rather than assets generating income? Let's say someone has $8k month with $4k being from a pension, $2k from SS, and $2 from investments. That means they only might have $500k in savings to generate that income. And when they die if that $500k wasn't eaten up at the end of their lives that would be split amonst their heirs.
The SS definitely and usually the pension do not support their heirs till death. Thus the luxury retirement today's retirees have is often supported through a pension. But how many 20 and 30 and even 40 somethings can count on a pension? And how many who even have one will have as generous a pension as their parents?
I guess it's possible that people will be inheriting enough for retirement and college. If you think you are getting an inheritance please explain if it'll be enough to retire on or just a vacation.
Friday, September 14, 2007
0 people spend less than $50/month per person
11 people spend between $50-$100/month per person
12 people spend between $100-$150/month per person
10 people spend between $150-$200/month per person
7 people spend more than $200/month per person
The majority of people between $50-200/month per person. But looking at the numbers I think perhaps I can assume, perhaps people who voted can comment on this, that it's more likley people spend between $100-150/month per person with the 11 and 10 people voting in the two categories next to this one are very close to the $100 and $150 marks rather than the $50 and $200 lines.
This is great, I spend about $150/month per person on groceries. Sometimes as low as $100, but on average about $150. I also do eat out, so it probably should be a higher number, but just for groceries that's not bad.
This month should be terrible both eating out and groceries. With all of our guest, however our new roomie is fasting so we no longer hvae to feed him.
Thursday, September 13, 2007
I have meet some very interesting people online who feel that immigrants have taken their jobs away from them. That these people work much too hard and for too little money which makes it difficult for them to compete.
But I question, wasn't everyone an immigrant at one point in time? Also why are people so upset over immigrants taking their jobs if they aren't working hard enough? I say this honestly because I married someone whose and immigrant, have immigrant parents, immigrant in-laws, and immigrant family and we've honestly hit the American Dream.
My kids will have a lot because DH and I were provided so much by our parents. They worked typically 3 jobs in college, and not fun or easy jobs. Our parents in their 50s (boomers), worked as a taxi cab driver, barber, maid, dishwasher to survive when they came over. They paid for college themselves and helped their parents.
And yet all are easily able to send their kids to college, travel every year, and retire at 55 without breaking a sweat. So how were they able to make it just working 9-5 jobs, raising children, coming with nothing, and still manage to be successful?
I think it's the attitude. The entitlement many Americans feel about what they are owed. How they expect to live at 28. I know this because a few of our friends who are Americans complain about not being able to buy a house where we live (very common). Yet not one other person/couple made the sacrifice DH and I made to buy a 1 bedroom condo and live there for a few years to build equity. Now we own a townhouse, none of our coworkers are willing to buy a townhouse, they want a Single Family Home. Again we sacrificed and made a choice for what we could afford.
This entitlement extends farther, we drive decent, older cars. Not fancy, but not junkers. But many of DH's coworkers/classmates drive cars worth at least 2-3x what we drive and yet they feel it's not enough. Many wonder how broke we are that we both drive compact cars. But it's a choice we're making to be flexible in our financial decisions. I would love to drive a Lexus, to vacation for a week in the caribbean, but we can't afford everything we want (well without charging it). Hence we aren't entitled to it just because we work hard. This entitlement might also stem from Generation X being spoiled by their Boomer Parents. We bought our cars, our home without a penny of help. We're the only couple we know who did so, most people had Down Payments or a car bought in full by their parents. We had to take out loans for everything.
Right now I could quit, have a baby, and stay at home without changing our lifestyle much. We can afford our house, our cars, and retirement maxed out without my income. My income is gravy, it mostly pays our taxes. Yet, we are still trying to save money so we can increase our lifestyle on one income.
People who blame immigrants for all their problems need to examine their own lives. They need to question why they spend time looking at others when they should be working on improving themselves.
Wednesday, September 12, 2007
First my brother is married with one child, townhouse, and a stay at home wife. He lives in the suburbs and is planning on selling his townhouse and buying a single family home in the country with a yard. They have a 10 year old Jeep and 3 year old Acura TSX. They eat out maybe once a week but in general stay at home with their 2 year old son. My brother's one indulgence is a Harley he bought right before he got married, although there was talk of him selling it since he rarely rides it. For the record he's only been married about 3 years so marriage hit him late.
Then my cousin is a 35 year old divorced, single guy who lives in the city in a very trendy neighborhood. He owns a 700 sq ft loft style condo without a parking spot, but is walking distance to public transit and many restaurants. Within the last week he bought a 2007 Chevy Corvette and enjoys going out with friends and family. I think he's lonely, so he's always hanging out.
I can definitely see the benefits of both. However many single people talk about how married couples save money by being married. The biggest money saver I can tell is they no longer feel the need to go out and do activities with other single or married friends. They have a companion to stay at home with for free. But single people often hate going home to an empty house and will instead have dinner out, or go to a movie, or coffee, bar, pretty much anything.
Second I think that single people unfortunately also are still are working on maintaining their attractability to the other sex (or same). Where they buy new clothes, date, work out a lot, etc. This is natural and unfortunately I think can become quite expensive.
However singles also get things their way. They make all their own financial decisions, they have no joint financial goals. They are the only ones controlling the purse strings. My cousin decided to buy his dream car now because he can afford it, has no future wife or kids. It strangely I think paralleled my brother's purchase of the Harley. While single they were or are able to indulge in spending money, that would never happen to a married person.
The married person would have to consult with their spouse. They would have to ask the question is this purchase selfish? What does it contribute to our goals?
So when I'm questioned by friends is it better to be married or single? I'm still debating. I love being married, but I can definitely see the good points of being single. I also can see why singles complain about spending more money than married couples. But I also realize that married couples make more sacrifices for marriage and money.
Tuesday, September 11, 2007
I was hoping to get rid of my car in another 3 years. Consumer Reports compared the cost of keeping a car for 15 years versus replacing the same car every 5 years. Of course the magazine does acknowledge that the car needs to be properly mainted to last that long. Another major factor in keeping a car for 15 years is the brand of car.
On their list of cars likely to make it to 200k miles are either a Honda or a Toyota. However the cars least likely to make it to 200k miles were mostly foreign european cars. I guess this means my corolla will run until it dies, but our ford focus could have trouble making it to 200k.
Well I'll never say I'm selling it or buying anything until it happens.
Monday, September 10, 2007
Stop Paying Late Fees
Late fees are a pain for credit card holders, but they’re big business for the credit card companies!
Your credit card company won’t tell you if it’s strategically mailing out bills late in the billing cycle to maximize the number of late payment charges – but it’s a common tactic. You really need to act upon the bills right away (if you’re mailing in your payment) to ensure it’s in on time. The law requires credit card companies to send the bill out at least 14 days before your payment is due – but count up the three days for it to get to you and the three to five days for the payment to arrive, you may only have one week’s wiggle room.
Although the Fair Credit Billing Act requires lenders to credit payments as soon as they come in, each issuer is able to set its own guidelines for payment, and if you don’t follow these guidelines to a T it could take an additional five days for payment to be credited.
For example: your credit card company may require your payment to arrive in the preprinted envelope included with your bill. Make sure you read all the policies stated on the back of your credit card bill and follow them exactly.
Alternatives to Mail-In Payments
Or you could pay online or by telephone. Many online and telephone banking packages are very inexpensive and when you eliminate the cost of sending out paper checks, they’re practically free. Although your payments online are usually processed the same day, you still want to make payments a few days before the due date, just to be sure.
Automatic withdrawals from your checking account are great if you’re forgetful to pay online, but beware that you have money in the bank at the right time or you could get hit with an overdraft fee. You also don’t want to make JUST the minimum payments unless you want to pay INTEREST through the nose, so automatic payments are a bit trickier as you may not
be able to forecast your bill amount and how much you can afford to pay – much more difficult to “set it and forget it.”
Perhaps your due date falls at a time of the month when you’re typically cash-strapped. You can also call and arrange with your credit issuer for a different date.
Double “Check” your Checks
This may sound silly, but like your teacher used to say “always double check your work.” Sending a check without signing, or writing the wrong amount can make your check useless, even if it made it on time. Write legibly, and avoid writing memos on the check like “I’m making an extra payment” as this can cause the check to circulate from department to department further delaying its clearance. Oh, and make sure if you’re using your own envelope that you use the correct address!
Reversing the Late Fee
Many late fees go unnoticed by credit card holders who rarely double check their statements. If you’ve been charged a late fee, you can contest it if you call your credit card lender and ask them to waive your charge. They’ll most likely honor your request provided you’re not habitually late. If you’re consistently sending out payments on time and still
frequently get dinged with late fees, (you suspect your credit card company’s not being honest) you can protect yourself by sending your statement with a return receipt or certified mail to prove you are sending your payments at least ten days before they’re due.
Linda Bustos is an Editor for CreditorWeb, where you can learn about personal finance and credit cards.
Sunday, September 09, 2007
The Establishment Always Wins...
A few weeks ago I had the displeasure of logging onto a blog site that has dedicated itself to hating Baby Boomers (born 1946-1964). Being born in the mid 1950’s and a Baby Boomer myself, I was curious to find out why the generation of love and peace was now the root of national hatred. My investigation revealed a Generation X (born 1965-1980), approximately 51 million people, most of whom are hell bent on blaming my generation for their woes. Generation X’s main complaint is the stress the now aging boomers will place on the Social Security and Medicare programs. Generation X, as they put it, doesn’t want to foot the bill on a carefree, irresponsible generation of boomers.
I found web sites such as “Die Boomer, Die” and others dedicated to the death and destruction of ‘The Flower Children’. It’s as if the Baby Boomers themselves should be eliminated just for being born. These web sites are convinced that if all the Baby Boomers died, the Generation X’rs own lives would be better. Gen X’rs would have more jobs available to them, wouldn’t have to pay larger taxes, have better choices of homes, etc. Such hatred, to me, is remindful of the Jewish Holocaust and maniacal rants of Adolph Hitler. Hitler thought the world would be a better place if all the Jews were wiped off the face of the earth. Such trains of thoughts are very, very dangerous and frightening.
I concluded my research by viewing the movies of the late 1960’s when the hippies (Baby Boomers) were in full force. You can find out a lot about a generation by watching the films of their times. The one film that most accurately depicts the Boomer Generation, in my opinion, is the Academy Award nominated, “Easy Rider”. The movie filmed in 1968 but released in 1969, starred Peter Fonda as the free spirited black leather-wearing motorcycle hippie, ‘Captain America’ (who produced the film) and Dennis Hopper (who wrote, starred and directed the film) another free spirited, natural leather-wearing motorcycle hippie, ‘Billy-The-Kid’. The two actors epitomized the Boomer Generation perfectly. From the opening credits, the hippie couple couldn’t rent a room, eat in a restaurant or be treated with respect. They were spat upon, discriminated against, hated, called faggots, thrown in jail and finally casually but brutally killed in the end by two local rednecks that happened to pass them on the open road. The generation of peace and love, who finally stood up and questioned authority has always, even to this day, been criticized and silenced.
We Baby Boomers watched our beloved leaders; our hopes for a new, changed society get blown to bits. The Establishment always wins. We watched our beloved President John F. Kennedy brains get spilled out onto Jackie’s pretty pink dress in 1963. We watched the greatest peace activist of the century, Martin Luther King get gunned down on an Atlanta balcony in 1968. We watched our next great hope, JFK’s brother, Robert Kennedy killed in 1968 after winning the presidential primary. Do you think it a coincidence that so many men were assassinated during this period? Over 60,000 of our peer’s lives were lost in the Viet Nam war while we listened to the lies of our then government. And now today, the woes of the current generation are being blamed on the Baby Boomers. It’s not the Baby Boomers fault, people! It’s the Establishment, stupid. The Establishment always wins! We hippies found that out the hard way. You can’t change the system. The House always wins!
In the movie, Easy Rider, the counter-culture tried to find another way. We set up communes, tried to live off the land and tried to change the system. But as Jack Nicholson, who played an ACLU attorney in the movie, who later gets hacked to death by some local townspeople said, “the hippies are feared, because we represent freedom, and that’s what they fear the most: the fact that we can be free.” That statement was true then as it is true today. The Baby Boomer generation meant freedom. Freedom from the rules and regulations. Freedom to think a different way. Freedom to live a different way of life. Freedom to live anti-establishment. As I have said before and I will repeat one last time: The Establishment always wins. You’re doomed. Stop blaming us for your problems. The problems were there before you came on the scene and the problems will be there when you leave.
And so it goes.
Saturday, September 08, 2007
Fantastic Guest post by Fabulously Broke in the City. Check out her website..
Most people want a lot of things, without having to sacrifice or save for it. It's just an observation, but no one wants to give up their expensive toys, their daily lattes or their vacations to the Caribbean to accumulate wealth. They'd rather it just be given to them, with as minimal effort and work as possible.
It's the same for weight loss. That's why the weight loss industry is such a trillion dollar money maker. Everyone wants the magic pill that will speed up their metabolism, and make them lose weight in two weeks, without having to diet, cut back on high-fat junk foods, go a little bit hungry, and exercise. They all want the magical potion, lotion, pill and solution, but what they don't want to hear is how much sweat and effort that goes into losing weight because they aren't wiling to work for it.
Husband was asked half jokingly for money by a friend who had wanted to try and turn her finances around, because she felt that their family income of ~ $60,000 was not enough. She knew I made a good amount of money, and we were still able to sock away a sizeable retirement fund as well as pay down our debt. Considering Husband didn't work, she wanted to know how we did it. After Husband explained what I did, and we managed to accumulate $12,000 in retirement thus far, as well as pay down about $14,000 in our debts in the past year, and the plan was that we would be clearing another $26,000 by the end of 2008 if we stayed on track, his "friend" said: "If you guys are so damn rich, give ME the money". Husband was a bit stunned. First, she had asked for his advice in how to make $60,000 go a long ways. He didn't offer up the information without prompting. Second, this was coming from a girl (I refuse to call her a 'woman'), who had a house bought and given to her as a wedding gift by her father, never had to really work for anything in life and yet she still had the audacity to ask us for money. Even half jokingly.
Well, joking around in good fun is one thing, but as we all know, jokes or good natured jibes can be taken too far. Husband relayed a recent event about what happened between his mother and his uncle. See, I had never understood why in the last couple of years, his uncle had stopped coming over with his family for the big Christmas dinners, and Easter gatherings. They used to come over with their 3 kids, have a great time, open presents for one another, and generally, just get together.
And all it took was a single comment to ruined his mom and uncle's 50-year old family bond.
Husband's cousins (in their mid-twenties) were sitting by the fire in his parents' home, stuffed to the gills with the food that their aunt (Husband's mum) had been preparing since 4 a.m. that morning, and his cousin had the nerve (probably bolstered by all the stuffing and turkey, being a turkey himself), loudly proclaimed with a lazy smile: "Aunt Em, you and Uncle Paul have so much money. You should you give our parents some of it, so they can pay off their credit card bills. You and Uncle Paul don't need it as much as we do. You both are just being selfish."
His mum froze in shock.
See, even though Em was not a rich millionaire, she had enough money to do what she wanted in life, having earned a $40,000 salary most of her life, she saved as much as she could and was a very frugal woman. Since she felt blessed and had a good generous heart, she wanted to share her savings with her family if they were in need, and had been subsidizing her brother and his family for many years, a fact I am sure her nephew and niece were aware of. Not only had she had given cash gifts to her brother knowing he could use the money, but she had also co-signed a loan for his son, her nephew, so he could attend University, and his cousin reciprocated by defaulting for so months that creditors got frustrated and started to hassle her for the money. It wasn't until she threatened to call the cops on her own nephew, that he finally started paying his loans, but made it clear that he resented paying it every month, because she had "so much money" that she should've been able to clear his loans for him, but she was just being stingy.
But it was soon clear to us that it was not her brother's influence on the children that had prompted them to boldly ask for money, but it was her sister-in-law, Lindsay who controlled the family. She had told her children since young to ask their Aunt Em for more money because she was so "rich". Later, we found out that she had told her nephew NOT to pay his student loans, because "Aunt Em will take care of it, because she and Uncle Paul are rich".
Even though Lindsay was aware that Em did not make much money (probably as much as her brother), she began to believe her own lies and concocted an outrageous figure in her head about how much she thought Em and Paul had squirreled away. So instead of accepting that her family had a financial problem, and were unwilling to cut back and save, over the years, she shifted the blame to Em, citing her sister-in-law's unwillingness to give her own brother money that was the cause of why they were in so much debt. But even if Em had cleared their debts for them, it would not be the last time. That family would've run up those cards again, and had been at Em's door asking for more cash.
So, Em had decided to let that one co-signer incident slide and just vowed never to co-sign for relatives again, chalking it up to a bad experience. But that one comment was the final straw on the proverbial camel's back. Being blatantly treated like a bank, and asked for money at a family gathering that she had worked hard at preparing with love for her family, was too much. She was so visibly upset (and she's normally a calm, collected, sweet woman), that when Husband's father, Paul asked her nephew to apologize and take back the comment, and they refused, citing that she and their uncle was just being stingy and selfish with their money and they couldn't understand why they didn't want to help out their family. Paul was furious, and told them to get out of their house and to never come back again.
From that day onwards, the family cut all ties of communication with her brother (which is sad, because Em's parents had died recently, and he was all she had left). But all it took was that one comment, even if it was originally said in jest. Now she hears from other mutual friends and relatives that her brother's family is in a lot of financial trouble and may have to sell their home to pay creditors because they couldn't come up with the money.
As the Gimme-Gimme Generation, we've grown up with instant gratification, thanks to our instant cash credit cards, and the whole notion of spoiling and treating ourselves however we'd like, because we only live one life, and we deserve it.
But do we really? Well, I for one, strongly believe that we certainly deserve what we get in life, even if it isn't what we want.
Friday, September 07, 2007
So the conversation ends because it becomes obvious that DH really has no idea or we're just willing to discuss such personal issues.
Thursday, September 06, 2007
The bonus I think is they have this online bill-pay which would be great because I hate transferring money between online and my Bank of American Checking Account. I find it takes 2-3 days to transfer the money then I have to mail my payment off asap all the time, so the amount of time my money is lost in cyberspace has not been worth the effort of the interest. I know others may find it worth it, but we do pay a lot monthly to our mortgage and to DH's tuition.
So we need ready cash during the year. I also don't like scrambling looking for money in 5 different places. Though HSBC doesn't have seperate accounts like ING, it does have a lot of ATMs worldwide. So we travel we'll be able to access our cash internationally without fees. Something I thought about doing before we travelled last time, but we were lazy and didn't set it up in time.
We'll see how it goes. Minimally we have to leave it open for 6 months. Then we can close it.
Wednesday, September 05, 2007
When I read about couples who segregate their money I wonder how can they do it? How can they manage 3 different checking accounts for mine, yours, and ours? I have enough trouble staying on top of 1 checking account such that I think I would probably lose all three. Plus how would you delegate who pays the bills from "our" checkbook?
We ended up going with a joint everything because we didn't have enough money to keep things seperate. We made so little as graduate students and our mortgage, etc was so high that it took two paychecks to make ends meet. And if we didn't want our checks to bounce then we needed to pool our resources. We were making $42k gross at the time.
So DH ended up being like a CEO, where he helped make major decisions. But I would pay all the bills, make minor decisions, and oversee our general finances as a CFO of our company. This may not work for many couples. It relies on trust especially on the CEO's part that the CFO is paying all bills on time, and not overspending.
I can see how this could strain a marriage because often time the "saver" in the relationship manages the books, but the spender doesn't care. In our relationship I'm the spender so it's probably a bit skewed that I manage the money. But I think because I do, it curbs my spending tendancies because I know exactly how much money we have.
Hence my suggestion to spender/saver couples, make the spender pay all the bills. They'll soon curb their habits when they start to see the big picture. If you want to get out of debt, make the spender see how the debt is affecting your family finances directly and the point will hit home fast.
Tuesday, September 04, 2007
What are the costs really associated with guests? I've found that besides a little increase in hot water, lights, etc, mostly it's eating out because you are too tired to cook. Increased gas usage from driving to see things or going to do activities. And basically paying for entertainment. Even if you pay for just yourselves, it's money you normally would not have spent on fun activities.
I think my budgeted $75/month fun money will be used up completely. Typically we don't spend it and we mostly use it during snowboarding season. But with this month I'll be going above and beyond in spending. Sadly I've already allocated an extra $1k for spending this month.
I guess I should add that for DH and I because our parents live far (over 3k miles one way), our visits are never weekend visits. And we have to do more and see more during that time. But it is nice to see family, I miss mine a lot so I consciously make a choice of spending more money on trying to see them whenever possible. To me it's just another line item.
I wonder if others spend as much when they have guests?
Monday, September 03, 2007
However overall our mortgage decreased another $685 (.15%). We increased our retirement through investments and contributions $3561 (6.32%), our EF increased $810 (5%), and we decreased our cash on hand by $3545 (22.63%).
Unfortunately we carry a lot of cash on hand at any given time because we're cash-flowing a lot DH's tuition approximately $20k/year. So we build it up and pay it out for 2 semester and 2 summer sessions. Each semester has cost $20k, and each summer session $5k. We did take out an $8500 subsidized stafford loan last year and probably this year as well. The tuition last year was paid Augut $2k, December $2k, February $8k, May $5k, June $8k, July $5k. So we keep the cash in our bank savings account and pay it out as required.
Any suggetions for a better method than just keeping the cash on hand would be great. But I'm not sure we should invest it.
Sunday, September 02, 2007
Well it was bad. Definitely not worth the $35. But then I come home with my butchered hair and my DH says "Why'd you pay $35 for the cut? Why not pay more to get a better haircut?" He says I've noticed over the years that you spend $25-40/haircut on average. However about 25% of the time the cuts have been bad. Why not pay more at a better salon and get a cut?
My answer? I don't know if this is how other women do it, but honestly I would pay more for a cut if I like the hairstylist, but finding a person you go loyally is tough. For some reason, everytime I find a hairstylist I like they change jobs, move after a 2-3 years and then I'm SOL. So I have to investigate and find a stylist other people reccomend, which is how I originally found this guy.
In CA it was the same thing I only found someone by referral. When you test out different places, I've found it's more often a waste. Although I'm typically driven my desperation. I like to wear my hair pretty short, so used to go every 2-3 months.
But now I'm stuck without my regular guy and I am unsure what to do. I don't think the more expensive salons are necessarily better. But I do need to find a stylist who is familiar with Asian hair. Or else. I've found my hair doesn't exactly look right when it's cut by a non-asian because of the texture, density, people are not usually experienced with cutting Asian hair.
But it will grow. However it pains me and my DH to have paid $35 for a bad haircut. sigh. Please don't tell me to cut it myself, because it doesn't work. I have hair that is more than an inch in diameter when in a ponytail. Also it's very fine and oily. It's not easily cut to look nice, although it is cheap to grow long and whack it off ear length. But even then it's too hot to wear with layers and thinning.
Saturday, September 01, 2007
Are the lender predatory? Yes. But is it entirely their faults? No way. These people probably need to take a look in the mirror and acknowledge their desire for new cars, larger homes, etc. The first family refi their home to pay off two new SUVs. The second family wanted a home but didn't care to sell their trailer first. The third family were renting but the landlord selling the home caused them to rush to buy anything. Thus all three families knew they were getting Adjustable Rate Mortgages (ARM) but none cared. They only cared about getting into the house, then once they were in, suddenly the payments were unaffordable. The fourth family was the only one which claimed they thought they were getting a fixed rate mortgage but it was switched on them at the close.
Um, hello? If you know you are getting an ARM, how can you be a victim? If you know what your payment is and you accept it, and are told it will change why do these people move forward with buying the home anyway? Is it because they just have to have a house now???
I have to admit the first time we bought a house in 2002, we were wet behind the ears. We did it behind our parents back and without telling anyone so we had no advice, no experience, no wisdom given to us. We were fortunate to have a wonderful RE agent who guided us to buying a house within our means. She agreed with our "parameters" for purchasing. She even guided us to a 30 year fixed loan, discussed with us about putting a 10% down payment, and closing costs. I realize looking back we didn't get the best rate or best closing costs because we used a mortgage broker she reccomended instead of a bank, but he was honest.
I wasn't happy with the mortgage we ended up with I think it was 6.25%, 30 year fixed, with no points but it was decent. After that I learned how much cheaper banks/credit unions are. And with our credit scores we could have used either. However we did have a problem with DH's visa status, hence a mortgage broker was willing to put us with a subprimer lender get circumvent the J-1 Status. We weren't married (yes another stupid mistake) so our loan was difficult to push through. When we refinanced with Washington Mutual we took DH's name off the loan.
Anyway we knew what rate we were getting and though it wasn't perfect we ended up better than expected. Thus I feel these people are unfairly crying "victim". How can they really claim to be victims when they chose to purchase homes they knew were expensive? Or were refinancing a house they could afford into something unaffordable?
We've become a nation of wantitis. We want to constantly keep up with the Jonese, without ever considering we don't have the means to.